Are you struggling with corporate debt or cash flow problems? Is your business insolvent – unable to pay its debts or maintain its regular debt repayment commitments?

If this is the case, the company’s directors must act to stop the company from wrongful trading (trading while insolvent). Knowingly continuing to trade while insolvent, especially if this results in the creditors position being made worse, may lead to the company’s directors being barred from future directorships and held personally liable for the company’s debts.

If your business is in financial difficulty there are a number of options to consider. These can be split into two areas: Business Rescue solutions and Business Closure solutions.

Business Rescue Solutions

Business rescue solutions are designed to save a limited company which is still viable. Solutions which fall within this category include:

• Company Voluntary Arrangement
• Pre Pack Administration (Phoenix)
• Company Administration

Business Closure Solutions

Business closure solutions are used if a business needs to be closed. Business closure solutions include:
 
• Members Voluntary Liquidation
• Creditors Voluntary Liquidation
• Compulsory Liquidation  / Winding Up

The most appropriate solution for a limited company will depend on a number of factors including the nature of the business, the status of the market, outlook for the future and whether the directors want to continue with the business or not.

The different solutions available are explained in detail in this area of Beat My Debt. However, the best way to understand which solution is right for your company is to speak to an expert. 

The Beat My Debt forum is great place to start getting access to these experts.

Alternatively you can call Beat My Debt free on 0800 077 6180 and speak directly to one of our advisors who will give free, independent and confidential advice.